How to improve your credit score
What is a Credit Score?
Each provider of High Cost Loans, Bad Credit loans, Payday Loans, Online Loans and No Credit Check Payday Loans will report to a Credit Reference Agency (CRA). Every person has a credit score logged with a Credit Reference Agency. A Credit Score is often referred to as Credit History and a persons credit score is affected by a number of things, some of which can be influenced by the customer.
A Customers repayment history, ability to repay, the volume of loans and amount of credit are all things that can be directly improved or worsened depending on the actions of the customer.
This article aims to help and advise on the things you can do to improve your credit score and therefore, improve your chances of obtaining the best value credit. The main thing to remember when trying to improve your Credit Score is patience. By following the hints and tips in this article you should be able to improve your Credit Score but it will take a little time.
8 tips to improve your credit score
1. Avoid late payments
Making your credit payments on time is one of the biggest factors to affect your credit score. To help with this, QuidMarket send friendly payment reminders by email and text to allow you enough time to ensure there are sufficient funds available to make your payment.
Setting up your payments to come out as a Direct Debit or Continuous Payment Authority is an easy way of ensuring the payments are made on time – these are usually the most convenient method of payment as you will not have to do anything as the payment is made automatically. Some companies even offer an incentive for paying electronically as it is cheaper to process.
2. Keep balances low
When using Credit Cards and Revolving Credit it is important to keep on top of the payments and balances to show the companies you are managing your finances well. By clearing the balance of your credit cards each month you can sometimes benefit from various incentives offered by the company, for example, discounted rates, gift vouchers and high street promotions.
3. Don’t have lots of different loans
If you have lots of small balances with multiple companies can reduce your Credit Score. If you are in a position to do so, consider clearing some of these amounts to reduce the number of outstanding loans – this should have a positive effect on your Credit Score.
4. Leave cleared accounts visible
Once a loan has been paid off you can have it removed from your credit file – a lot of people prefer this as it is neater and it doesn’t look like you rely on credit. However, we have all heard the tern “no credit history” so leaving loans that are paid or settled on your credit file can have a positive affect as it shows prospective suppliers of credit that you have the ability nd intention of making the repayments.
5. Check your credit file regularly
Every company you have credit with will report into a credit reference agency. To find out what companies are reporting against your name you should regularly check your credit file. Sometimes you may find an account you thought was clear is still showing as open, or worse still, had a default notice raised.
Unfortunately, there are rare occasions where your details have been used to obtain credit – checking your credit file regularly will enable you find this out inform the relevant companies.
There are a number of Credit Reference Agencies in the UK. The 3 major credit reference agencies:
6. Apply only when you need to
When you apply for credit it leaves a “footprint” on your credit file. A large number of footprints in a short amount of time can have a detrimental effect on your score. The lower the score the harder it may be to obtain traditional forms of credit.
7. Apply only for the amount you need
When applying for credit it can be tempting to apply for the highest amount possible rather than the amount needed for the purpose of the loan. This can have a negative affect in a number of ways.
By applying for a high amount of credit the application has more chance of being deemed unaffordable and therefore declined. As mentioned above, every application will leave a footprint on your credit file and a “declined application” will harm your credit score. When the initial application is declined this can often lead to other applications for credit and therefore, more footprints, lowering your overall credit score.
If the application is successful a large loan can often come with larger repayments, or a longer repayment term, meaning it could be more difficult to make the repayments. This could then lead to a Default Notice, County Court Judgments (CCJ) or worse, an Attachment of Earnings (AOE).
8. Ensure you are on the electoral roll
By registering on the Electoral Roll credit providers will have that added confidence you are who you say you are and the home address details you have provided are accurate and will therefore improve your credit score.
You can register on the electoral roll here.